Strategies of the Development of Entrepreneurship and SME

3. EXPANDING SOUTH EAST EUROPE TO THE REGION THE AREA OF PEACE,STABILITY, PROSPERITY BY DEVELOPMENT OF ENTREPRENEURSHIP. -REVIEW OF THE SME SECTOR IN ALBANIA, BULGARIA, ROMANIA ANDSERBIA 163.1 ALBANIA3.1.1. SME SECTOR DEVELOPMENTAfter the long period of isolation Albanian economic reforms of the first decade oftransition were much focused on the areas of privatization, deregulation and liberalizationefforts in all sectors of the economy. As result, over the last few years, growth averaged atclose to 6% and for 2005, the real GDP growth rate was 5.5%. Economic growth over thisperiod was accompanied by ongoing consolidation of macroeconomic equilibrium, beingevidenced in overall stable monetary indicators, low and stable inflation rates, and in thereduction of budget deficit and public debt.The substance of the important measures undertaken by the Albanian Governmentremains the reforms for the development of the private sector, especially for the SMEs. Since2001 a national strategy paper for the development of the SMEs was drafted by the Ministry ofEconomy and approved by the Government of Albania. Most of the actions are related tomeasures which contribute to relaxing of bureaucratic barriers to the business establishmentand operation, enhancing the transparency of the public administration on its relations with theprivate sector and improving the policy making and institutional set up in support of SMEs.Overall objective of Government SME strategy is to create a positive business developmentclimate to allow for sustainable SME growth. Its specific objectives are: encouraging theexpansion of existing businesses and the creation of new ones (Start-ups), including thetransformation of traders into investors in production, while simultaneously supportingproduction for export and SME joint-ventures. To reach the above objectives a number ofconcrete measures will be taken, such as:• Institutional strengthening and development through SME policy and programdevelopment and delivery of SME support services via intermediary institutions (such asthe Chambers of Commerce, Regional Development Agencies, business associations,consultancy companies, etc.);• Working towards a transparent legal and fiscal framework which is conducive to SMEsdevelopment;• Improving the management of SMEs, via training programs delivered by intermediaries;• Improving access to finance by expanding micro-finance and initiating new tools such ascredit guarantee schemes, seed capital, leasing, etc;• Achieving balanced regional and sectoral development through incentives to stimulateSMEs development in deprived areas and regions.Taking in consideration the number of persons employed in a firm, Albanian Law No.8957, Small and Medium Size Enterprises as of 17 October 2002 uses the following criteria forSME classification:• Micro enterprises: up to 5 employees;• Small enterprises: 6 - 20 employees;• Medium-size enterprises: 21 - 80 employees;• Large enterprises: over 81 employees.16Prepared by Dr. Eriæ DEJAN, Associate Professor School of Economics, University of Belgrade, Belgrade BankingAcademy15